Wednesday June 27, 2012
‘Pre-loved’ designer bags and shoes at affordable rates
Story and photos by GRACE CHEN
DID you know that a Hermes Birkin handbag can be used as bank collateral?
But lest Malaysian owners think they can exchange their pricey carriers for cash with the local banking institutions, Tina Yow, the 30-something director of Attic House, a ‘pre-loved’ bags and shoes boutique in Plaza Damas, quickly points out that such arrangements are only available in private banks in ceertain parts of Europe and only to a select circle of trusted clients.
Such transactions number zero in Malaysian banks. Still, Yow insists, it speaks volumes for the kind of value designer handbags can demand.
The seed of the idea of boutiques offering pre-owned designer bags and shoes in Malaysia is believed to have come from Hong Kong where the trend for second-hand designer bag shops started in 1998.
Yow, a Seremban native, who was running a corporate gifts company on the island seven years ago, said the demand for pre-owned designer items was so popular that one chain store, Milan Station, was able to expand its outlets to Taiwan and China.
Thinking it could work in Malaysia, Yow returned to Malaysia in 2006 and opened her first outlet in Plaza Damas with only 26 bags.
“Ten of them were mine, the rest were all from my girlfriends,” said Yow who revealed that the capital outlay had cost her some RM250,000, not including her own Louis Vuitton handbag collection, then roughly valued at RM90,000.
The biggest hurdle for Yow to overcome was conservative mindsets.
“It used to be taboo for the Chinese to carry secondhand bags, or even worse, secondhand wallets and shoes because they believed it to be inauspicious. There is even a Chinese saying, ‘I don’t wear other people’s old shoes,’ which carries a negative connotation,” says Yow.
But times have changed. Today, Yow has a second outlet at Scott Garden in Jalan Kelang Lama and both outlets have sold some 7,000 bags.
“There is a big market in Malaysia for luxury goods. Customers can come in and swipe their cards for a RM138,000 crocodile-skin bag without any hesitation. One of them is only 23-years-old,” said Yow.
Another challenge lies is in assuring the owners of bags that their goods are safe in her store.
“A past case involving a pre-owned boutique run by a Korean and a Japanese, which shut down and disappeared with all the owners’ bags just after six months of operation has caused many owners to be wary,” says Yow who revealed how she was constantly “spot checked” by owners who called her every day just to ensure her shop was open.
She reckons that it would work in the favour of pre-owned goods retailers to gather in one area, like Plaza Damas for example, where the income bracket of the neighbourhood will buoy sales.
Currently, there are already three such outlets in the mall.
“I feel that a concentration of shops in a row of shophouses will bring in higher customer traffic, which will be beneficial to all,” said Yow.
The driving factor behind the pre-owned industry lies in status seeking and it helps that designer brands have set the wheels in motion with well-executed advertising campaigns.
“People want to be associated with designer brands because it conveys status. But buying brand new is not always an option so the next best alternative is to look for that great bargain. For example, the original price for a pair of Sergio Rossi sandals can cost RM1,640 but a pre-loved pair is only RM1,000. And, how else can you get a Fendi bag which can cost no less than RM1,000 for half the price? So, it is also the prospect of a great bargain that appeals,” says Yow.
At the moment, the stock in Yow’s Plaza Damas outlet alone is valued at RM2mil, but all of them are placed there on a consignment basis.
For a measure of protection, each bag is insured against fire, flood and robbery. Insurance premiums have cost her some RM1.5mil a year. The current business model for now covers selling and buying, through which Yow earns a commission.
Rates can go from as low as RM10 to as high as RM5,000 per bag, and the Attic House’ monthly sales hover around RM200,000.
For Yow, the question of going into bag rental is still a dicey one as she feels the Malaysian market has yet to attain the same level of maturity as overseas.
“Imagine how I am going to get a peaceful night’s sleep if I were to rent out a RM70,000 Birkin for RM2,000 a day? I could take a deposit for RM70,000, but we are dealing with rental agreements here.
“Would you give an apartment owner the full sum of the property price to rent his property? And there is also the question of returning the bag in its original condition. What happens if there are scratches? In the end, the last thing I want to create is ill-will,” said Yow.
Past experience has taught Yow that mutual trust is not an inherent feature in the retail industry. One customer who left her bag at the shop to be cleaned two years ago has yet to return and collect it. Eventually, Yow had to sell the bag for RM800 to cover the RM400 cleaning fee. However, she assures that, should the owner choose to return, she will be entitled to half of the sale’s proceeds.
For now, the closest thing Yow can offer is an installment plan for customers where they can make monthly payments for their pre-owned bags. The payment plan is limited to a year and bags can only be taken home after completion of the payments.